Elaine Meinel Supkis
The utter insanity and panic over the fact that the Japanese Carry Trade has died is obvious. Unlike last year, when everyone was so pious about how Japan was in this terrible depression while inflation raged in the streets of Tokyo, the G7 nations hammered China nonstop about raising the value of the yuan. But not a peep about the very weak yen which was dropping against all currencies except Zimbabwe! Well, now that the carry trade has violently unwound, the G7 is demanding it back! They need it for LIQUIDITY. Just as I stated several years ago! And I was right! Wow! Give me the Nobel Prize for Economics!
The entire financial system has been corrupted and corroded. This is a classic situation. Every time a financial system is saved from its own tendency towards deceit and deception, the rules forbidding fraud and follies are dropped or terminated one by one, step by step. Then the bubble/collapse happens again.
Starting with the Tulip Mania, everyone assures each other, this will be prevented. The downside of a bubble economy are painfully obvious and everyone wants to avoid this pain as much as possible. Yet they do it over and over again.
On top of this, the desire to make money in a system that is out of whack with economic health and well-being is very strong so the people who have political and economic power will re-engineer economic rules so they can get rich quickly even if this means outright fraud, theft and the destruction of the core of an economy.
Like my oak tree which dropped off one third of its limbs yesterday, stopping all traffic on my mountain, so it is here with our United States. My oak tree is huge. It used to be twice as big but over the last 20 years, even as it continues to grow and have lots of leaves, it has really been dying.
This is due to two things: when this field was first cleared 250 years ago by the Slatterlys, a colonial family in Berlin, they needed one spot in the field to rest out of the hot sun, a place for the oxen and the people haying that would be cool and also have a nice view of the entire valley. These hard-scrabble famers recently fleeing Europe lived in great poverty but they still appreciated the beauties of nature and so this tree grew greater and greater alongside America's growth into the world's greatest empire.
The single branch that fell this week is at least 4' in diameter. The split in the trunk is over 7' tall. The fallen branch stretched across not only part of the hay field but the entire two lane road I built years ago.
Now the tree, weakened by industrial pollution, namely acid rain, will die rapidly. Already, the crown shows many dead branches. Insects will enter the core of the tree and eat it inside-out.
No longer can one rest at peace in its shade: the tree is no longer shelter but deadly, a hazard. For this great limb fell on a windless day. Silently, it suddenly fell with a tremendous boom. So it is with our empire.
Even if nothing is happening, it can suddenly fall with a boom. The fall itself will be violent but the trigger doesn't have to be any storm or earthquake: like the fall of the British Empire or the Soviet Union, previous storms will shake it and weaken it but the actual fall will take all by surprise.
Economies are like this, too: there doesn't need to be any great event for it to collapse, all it needs is to be sick, overextended, overweighted and weakened by previous storms. Then it falls. We are watching exactly such a fall.
The violent unwinding of the messy and very dangerous Japanese carry trade has now gotten so great, all the G7 nations are dropping all pretense that there really was no such thing as the 'Japanese carry trade' and are now all trying desperately to restart this magical flying piggy bank.
From day one, I have written extensively about Japanese trade and their queer monetary games. The queerest part was their 0% lending. It really offended me back in the mid-1990s. But when they began to amass the world's biggest FOREX reserves in 1998 and onwards, I was astounded.
Astounded that the US was doing nothing at all to stop this! It wasn't even talked about. If the IMF didn't have their web page that shows various national FOREX reserves, I would have not been the wiser. But I hang out at the IMF web site so it came to my attention. China has now far, far surpassed Japan in this matter. But they are merely following the leader in this regard.
Over the years, I have tried to riddle out what the Japanese carry trade was all about. By 2006, I was pretty certain what it was: it was flooding the entire planet with liquidity. It was like some of the very oldest stories told by human beings.
It goes like this: there is this tree, this giant World Tree which top branches go to the stars. The trunk of the tree is earthly life. And the roots go into the Underworld. Now, even back when humans barely had mastered fire and stones, they knew that the dark earth was also the place where all power and wealth came from. Wealth, to them, was life.
Well, the tree gets chopped down and out of the trunk comes all the water that makes all the oceans of the world. Everyone begins to drown. But along comes a god/goddess who says, 'Put this basket/plug/rock on top of the tree trunk and the water will cease welling up. So the water stops. But one cannot remove the basket!
In some very ancient tales in Asia, the monkey is too curious and removes the basket and dies a terrible death. Sometimes, a crocodile comes along and persuades the monkey to move the basket. There are many variations on this theme.
I view the Japanese carry trade as exactly this sort of deep-religious/magical thing: the Japanese chopped down the entire concept of banking which is rooted firmly in the concept of paying savers to park their money in a bank which then uses this as a basis for lending to people who wish to have loans. The very offensive 0% savings rate is a crime. It has chopped down the banking tree and out of the stump has flowed an endless flood of red ink.
This has covered the entire planet! As Japan merrily did this, the other bankers decided to break all the old rules, too. So they banished risk by chopping down the Insurance tree. And it began to bleed red ink, too. Soon, all systems were awash in red in via the Magical Flying Piggy Bank interacting with the most hideous invention of the monkey kings infesting the banking systems: the Derivatives Beast.
So here we are: the gnomes need the monkey mess in Japan and they are willing to do anything to restart it. So lets' read today's news with all this mythology firmly in the mind:
Japan Trying To Protect Banking System Amid Free-Falling Stocks TOKYO (Nikkei)--
The government is finalizing measures aimed at calming jittery financial markets, with a focus on three goals -- strengthening the financial system, spurring stock investment, and stabilizing the stock market.
*******************************************************
Economic Miseries To Dampen Shipping Firms' Profits TOKYO (Nikkei)--Shipping companies such as Mitsui O.S.K. Lines and Kawasaki Kisen Kaisha have slashed their outlooks for the full fiscal year in the wake of depressed demand, the strong yen and other factors.
******************************************************
Nissan CEO: Car Industry Faces Unprecedented Challenge TOKYO (Nikkei)--The automobile industry is in the unprecedented situation of being hit by a double whammy of a financial crisis and recession, Nissan President and CEO Carlos Ghosn said at a Tokyo forum on Tuesday.
*****************************************************Govt To Empower FSA To Ban Short-Selling In Times Of Volatility TOKYO (Nikkei)--
The government on Monday began discussing plans to give the Financial Services Agency the power to ban short-selling whenever the financial watchdog deems it necessary as part of emergency market stabilization measures, The Nikkei learned Monday.
*******************************************************M&As By Investment Funds Down 70% Worldwide This Year TOKYO (Nikkei)--With the financial meltdown making it harder for investment funds to raise capital, the aggregate value of mergers and acquisitions by such funds totaled just 218.5 billion dollars between January and September around the globe, a 70% drop from a year earlier.
********************************************************Currency Markets Dubious Of Joint Intervention TOKYO (Nikkei)--Foreign exchange markets reacted cooly to an effort by Group of Seven nations to talk down the soaring yen Monday, reflecting growing skepticism that even government intervention may be insufficient to ground Japan's currency.
For the last two years, I and a great number of professional hedge fund managers as well as assorted others have figured out the obvious connection between the yen going up and the Nikkei dropping. When the yen rises in relation to the dollar, the Nikkei dies. There is a grave danger when any system becomes this predictable: everyone reacts the same way so it MUST do what they expect since they are doing the things, making these things happen.
Ergo: when traders in London or New York notice that the yen is rising in value, they yell, 'Short sell the Nikkei!' And off it goes: in Japan, the handful of traders do the exact same thing. 'The yen is strong! SELL!!!' they yell on the floor and investors call the brokers or even have standing orders to sell under these circumstances.
Japan has set this system up where the yen and the dollar are on this awful see-saw and there is no escaping via other methods. Once upon a time, gold was used as a counterweight so central bankers as well as investors could shift their money into gold reserves and thus release pressure on asset/stock/bond markets. I am guessing that this was supposed to operate as a release valve or brake on obvious money-generating systems.
The yen/dollar duality is dangerous because it is so obvious, even total idiots could make money off of bets that assumed 'Yen rises in value, dollar drops, sell Nikkei stocks'. Now, the system is breaking down.
Why is this, we ask? Aside from the fact that the monkey that lifted off the basket from the stump of the World Tree is drowning, the other factor is simple: when even idiots figure out any system, it collapses! It doesn't matter if it is tulip bulb growers, Mississippi shares sellers or South Sea Bubble blowers. The minute everyone wants to be part of an obvious money-creation scheme, it collapses totally and NEVER comes back.
There seldom is anything left after the collapse to sell for even the original investments. We already are seeing 90% losses on those goofy Credit Default Swaps that were triggered by the collapse of Lehman Brothers! The collapse of the Japanese carry trade/yen/dollar see saw is very similar. When everyone crawls out of the wreckage, they will wonder why they did this silly business in the first place. But by then, it will be too late. The flood of red ink will recede after the Goddess of Deflation comes into the game and simply makes it all vanish.
THE ASAHI SHIMBUN
Megabanks to raise capital amid stock plunge
Once seen as the saviors of struggling foreign financial institutions, Japanese megabanks now plan to prop up their own financial bases to avoid disaster from the recent plunges of stock prices. Mitsubishi UFJ Financial Group Inc. (MUFG) on Monday announced plans to increase its capital by 990 billion yen through measures including the issuing of new shares. Sumitomo Mitsui Financial Group Inc. (SMFG) is mulling a maximum 500-billion-yen increase.
Mizuho Financial Group Inc. is likely to follow suit. Until recently, Japanese megabanks were believed to have staved off serious damage from the U.S. subprime loan crisis and were in a position to provide capital for their less-fortunate counterparts in the United States and Europe.
Japan boasted last year, they were not in trouble. Even after, just a month earlier, whining at China about being in this terrible depression which is why they had to have 0% interest rates. Last July, they boasted to the Chinese, they could drive the value of the yen down to 130 to the dollar by October.
China was very irritable last July and warned Japan, they would shift gears and begin hoarding yen. The yen began to strengthen. Japan said to China, they would flood China with liquidity from the magical World Tree. China said, 'We are the Dragon. Try it and you will die.'
And so it was. The yen has been slowly and now, swiftly rising in value. Not because global currency traders want it to rise. But because China wanted it to rise. This is China's first real monetary power play: muscling Japan successfully. The Japanese got the message. They want desperately to swim above this sea of red ink they created but this depends on everyone buying Toyotas and Sony stuff.
And this is no longer happening. So all the goofy trades based on these debts churned out by Japan are now being paid off and all those dollars from Australia or New Zealand or the US are flowing into Japan to pay off all those goofy loans at nearly 0%. This is all very mysterious and obvious at the same time. People can't borrow any more. They have to make margin calls due to stocks falling.
And since the Nikkei always falls when the yen gets strong, the banks and business hedges in Japan are collapsing because stocks are collapsing. Anything below 10,000 in the Nikkei is bad news. Tonight, it has fallen all the way to 7,000 and threatens to go much further. After all, even idiots know that 'If the yen rises, the Nikkei falls.' So gravity is working just perfectly.
From Breitbart:
Bank of Japan Governor Toshihiko Fukui met with his Chinese counterpart Zhou Xiaochuan on Thursday to discuss a wide range of international economic and monetary issues, BOJ officials said. Although the BOJ officials did not disclose the details of their talks, the U.S. subprime mortgage crisis and its repercussions across the world are believed to have been high on their agenda. Fukui briefed Zhou, governor of the People's Bank of China, on why the BOJ decided not to raise interest rates at its Policy Board meeting Wednesday as well as his take on the outlook for the Japanese economy, according to the officials.
********************************************************************************My comments to this story: 'Between us, we hold over $12 trillion in US wealth, money, bonds, stocks and other things,' says the Dragon, hauling out its acabus and clicking the wooden markers up and down as it adds up everything.
'I don't like losing this investment. I doubt you want to lose, either. As you know,' continued the Dragon, giving Miz Japan a very dark look, 'I have an interest in buying yen suddenly. But if you want to cooperate with me, we can keep the foreign demon bank accounts running for a while longer but you must do as I say and not run off and double deal me when the G8 meet, understand? No more calls for me to change the value of the yuan and we will let the yen drop in value against the dollar again.'
Well? We shall see if I am right about this. So far, when it comes to figuring out these people, I am right so the chances of the present status quo STRENGTHENING is VERY HIGH!
The collapse of the West will be put off, the battle between the Dragon and Miz Japan will evaporate and all will be well until we are disposed of. For loading us up with debts is the whole point here! And if this is what WE want, it will happen! And we will find some means of doing this, somehow.
Beggars at Beijing's Gates, we will continue to pretend to be an emperor while being in reality, the beggar. Until the Wheel of Fortune grinds us under its iron bound rims.
As I read the G7 statements coming out, it is shocking, really shocking, to see them openly talk about the need to flood the US with imports and the US must strengthen the dollar to enable Japan to flourish. They even admit that 0% Japan is the world's second strongest economy. But they don't call for us to flood Japan with our exports. Oh, no, not even slightly.
Bloomberg) -- French Finance Minister Christine Lagarde said Japanese authorities may sell the yen for the first time since 2004 after the currency surged to its strongest in almost 13 years. Speaking hours after the Group of Seven nations warned against the yen's ``excessive volatility,'' Lagarde foreshadowed a ``purely Japanese'' intervention to weaken it, saying in an interview that the G-7 had no plans to help. That leaves investors testing Japan's resolve as the yen's advance threatens to erode the earnings of exporters such as Canon Inc. and pushes stocks to a 26-year low.
Poor Japanese exporters! For the last 5 years, they have enjoyed record export profits! They got more and more powerful. Toyota is now outstripping General Motors as the biggest auto manufacturer on earth. Now, the silly yen is killing this fine game! The yen is making it impossible for Japan to undersell competitors or to penetrate the US markets. Rats.
Pay attention, please: Japan has the world's biggest trade profits. Not China. China imports a lot of stuff, so China has a huge trade surplus with the US but not with the world. Per capita, it isn't even slightly as well off as Japan. The other G7 nations all want the US to enable, help and assist Japan in destroying us in trade because they ALL want to destroy us via trade! This is the whole point: the G7 is NOT some solid organization with common goals.
It is a one-way street whereby all our trade partners assist each other in keeping trade with the US as unbalanced as possible. The crisis is NOT the end of the terrible, stupid and dangerous Japanese carry trade.
The crisis is the bankruptcy of the US, the world's biggest consumer nation. We cannot go half a trillion dollars+ in the red every year to all our trade partners. This has to end, the sooner, the better. None of our allies want this to end. Thus, the open lust to restart the carry trade con game.
Euro Slides to 2-Year Low on Rate Outlook, Recession Concern
(Bloomberg) -- The euro dropped to its lowest in more than two years against the dollar on speculation European interest rates will slide as recession looms.
The currency approached a six-year low versus the yen after European Central Bank President Jean-Claude Trichet said yesterday he may cut interest rates next week, less than a month after slashing the key rate by half a point.
Europe's economy is on the brink of a recession, with the region's manufacturing and service industries contracting at a record pace in October and German business confidence dropping to a five-year low.
I heard that German auto manufacturers like Mercedes Benz is going to force all the workers to take nearly one month off this winter! These cutbacks are due to one thing: the US isn't buying.
Last year, I visited the deep sea port in New Jersey to photograph the foreign ships pouring into our docks to unload massive numbers of cars. As far as the eye could see were parking lots surrounding these docks. But not ONE of the ships docking had any names on them that could be seen easily! I went from the Japanese ports of call to the German ones and it was the same: the ships were anonymous.
And huge! I couldn't believe how gigantic they have swollen over the last decade! They were all basically immense boxes that floated. The need to restart this flotilla's invasion is very important for our allies. So they will shrug as General Motors dies. They don't care. They want us to buy their stuff, of course.
I seriously doubt there are ANY American ships with even ONE car on it, sailing to either Hamburg or Yokohama.
G-7 countries express concern about excessive volatility in Japanese currency
(AP) - The yen rose to a 13-year high against the dollar in trading Friday, raising concerns in Japan that it could harm its exports of cars and other products because they will now cost more in U.S. markets.
The statement by the G-7 finance officials was released in Washington, Tokyo and other G-7 capitals. "We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability," the G-7 finance officials said.
Any American reporter writing this story should be yelling with fury. 'What the HELL???' Oh, Japanese cars will cost more than Fords? Well! We can't have that happen! We must make it easier for Japan to undersell US autos. Right? And traitors are usually shot at sunrise, too.
Note here that the G7 Europeans are demanding 'stability' and this means: the US buys and everyone profits while we accumulate debts. Via the carry trade, of course. Now for a good article from last year about this business:
The ‘Carry Trade’ and the Current Financial Turmoil By Michael MH Lim
In the simplest case, speculators and investors borrow yen at 0.5% and invest in US treasuries at 5%, earning a spread of 4.5%. In theory, this is not supposed to happen as the difference in interest rate between the two currencies is equal to the difference between the spot and forward rates of the two currencies.
In other words, the interest rate differential is theoretically offset by the appreciation of the yen over the dollar over the same period. Perversely, however, borrowing the yen puts downward pressure on the yen value. Furthermore, a confluence of factors in Japan, including a high savings rate and the government’s policy to reflate the economy out of recession and deflation through cheap exports, result in an undervalued yen and a low interest rate environment.
The yen has traditionally been undervalued, and the relative stability of the interest rate spread between the yen and other currencies has allowed investors to enjoy the ride from the carry trade for a long time. Japanese yen is reputed to be the most undervalued currency, even more than the renminbi.
It is estimated that the yen is 40% undervalued against the euro. To enhance their yield, investors could invest in bonds, equities, real estate, sub-prime mortgage loans or any other instruments. In short, the carry trade has become a major source of low-cost funds for the world, with money flowing into everything from Wall Street stocks, to main-street home mortgages, to emerging-market stocks and bonds. The yen carry trade amplifies the already serious distortions in the global economy.
Japanese excess liquidity is supporting asset inflation and bubbles across the world.
And Mr. Lim is correct. The carry trade is extremely distorting. So we have to question the friendship of our G7 partners who are flipping out because it is ending. They obviously don't have our best interests at heart.
Group of 7 Meeting in Tokyo Tackles Yen’s Rise
The statement from the G-7 officials and a surprise rate cut in South Korea highlighted the depth of concern over the latest wave of financial turmoil, which has wreaked havoc not only in the debt and stock markets, but also in the currency markets.
In the last few months, the yen has appreciated dramatically, while the euro and won have dived. The statement, which said the G-7 would “monitor the markets closely and cooperate as appropriate,” came as countries in Asia, spooked by the relentless sell-offs in the stock markets, scrambled to support their economies.
Japan’s prime minister, Taro Aso, said the government would expand a plan that gives banks access to public funds and would strengthen regulation on the short-selling of shares.
In South Korea, the central bank staged its deepest-ever interest rate cut during an emergency session in Seoul, while the Australian central bank intervened in the currency markets for a second day.
In Japan, the world’s second-biggest economy after the United States, the yen’s rise has hit the key export industry, as corporate giants like Sony are seeing their goods become more expensive in the crucial markets in Europe and the United States.
All countries trading one way with the US and in steep competition with each other are all dropping rates to 0% rapidly. Last summer, China raised both the reserve ratio rates as well as overall interest rates because they correctly foresaw a burst of hyperinflation. They should be praised for a good call.
The communists decided the hot stock market was too hot, incidentally, back then. They want generous trade deals but are not going to allow things to get out of hand. But now, everyone is racing to the bottom. The carry trade dies if everyone collapses global banking totally. But then, we won't have any banking anymore once this happens.
If everyone is at 0%, the monetary system will be officially dead. Like, the World Tree: chopped down.
GM is dying so we have to open the gates to more Toyotas! Right? This news is horrifying. And we have NO need to boost Japan's auto industry. None what so ever. Got that, everyone? Can you hear me, Bush? Anyone running for President? Good grief!
(Bloomberg) -- Gulf Bank KSC, Kuwait's fourth- biggest lender by market value, may suffer losses after some clients defaulted on derivative contracts linked to the euro, sparking concern regional banks may be further hit by the global financial crisis.
The losses were incurred on currency derivatives after a decline in the value of the euro versus the dollar, state-run Kuwait News Agency said today, citing central bank governor Salim al-Sabah. Gulf Bank will have to absorb the losses until an agreement can be worked out between the bank and its clients, the news agency cited the central bank governor as saying.
The Derivatives Beast is having quite a dinner. Yummy. I expect him to return to eating the banking systems in the West this week. Stocks are falling, this is weakening everyone playing markets with leverage and banks can't attract savings. Only more funny money from central banks. And Bernanke is handing out more of that to regional banks, now. The list of banks needing rescue is longer and longer.
And they are going to flourish under a 0% regime? HAHAHA. And now, for fun, we can go to yet another video that one of the readers posted here yesterday:
Marketplace Senior Editor Paddy Hirsch explains how banks have gotten frozen in their tracks, awaiting a rescue. More coverage of the financial crisis at Marketplace.org
The credit crisis as Antarctic expedition from Marketplace on Vimeo.
Elaine,
What u have been shouting for the last few years is finally penetrating into the sheep's skulls:
http://tinyurl.com/5wedxd
Quote: 'I have never seen anything like this in my life. I have been in the markets since the recession of 1973. I began working under an 80 year old broker who survived the GD.
Take my word for it, what is happening right now has NOTHING TO DO WITH ANY STOCK METRIC! The markets and share value are being driven by one thing and one thing only - BACKSTOPPING!
For example, if you have a position with a MF/Broker and that MF/Broker is not backstopped, you move out of that position and to the bank that is backstopped. This has nothing at all to do with investment metrics. This has brought countries like Australia to their knees; so that they had to stop MF withdrawals. This is what is driving markets at the moment. This trend will not stop until country default risk is gone which is still a long way off.
I have never seen anything like the global currency movement last week. I have been trying to draw an analogy for my not-so-financially-aware friends and colleagues here. It occurred to me what that could be.
Do you remember the Asian Tsunami in Thailand? Well, what happens just before you get hammered is that the water goes way out, the bay dries up and then you've had it. That is exactly what is happening now in the currency markets; the smaller currencies are being drawn down until they dry up worthless, and then the world is going to be hit by an ALMIGHTY DOLLAR AND YEN TSUNAMI!
Everybody is starting to run for high ground, but they can't find any.'
They are finally beginning to understand the end result of Yen carry trade.
God help us - it's too late.
Posted by: OC | October 28, 2008 at 12:59 AM
Here is the kill shot, the dream of one world currency, the SDR.
Coming soon to 'save' us from these icky national currencies that fluctuate along with some Global Governance to save us from our icky national constitution that could not protect us from the CDOs.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3269669/IMF-may-need-to-print-money-as-crisis-spreads.html
"The IMF, led by Dominique Strauss-Kahn, has the power to raise money on the capital markets by issuing `AAA' bonds under its own name. It has never resorted to this option, preferring to tap members states for deposits.
The nuclear option is to print money by issuing Special Drawing Rights, in effect acting as if it were the world's central bank. This was done briefly after the fall of the Soviet Union but has never been used as systematic tool of policy to head off a global financial crisis. "
Posted by: GK | October 28, 2008 at 01:04 AM
Elaine,
When USD and Yen finally implode due to the carry trade, would we go back to gold back currencies??
Posted by: OC | October 28, 2008 at 01:47 AM
GM is dying? I dont think so, their bread is buttered in China! They sell more cars there then they do here! The new market is China not the US. That is why the US is now a "saver". This is good music.
Posted by: Dutch Banker | October 28, 2008 at 01:52 AM
Shouldn't you be selling insurance with Obama? Beam me up!
Posted by: Dutch | October 28, 2008 at 01:53 AM
Yes, you deserve this year's Nobel Prize. No question. Certainly much more than the current publicity-obsessed "celebrity" who has it.
OK, yen carry trade is dying. Yen up. US dollar up, because the US banks facilitated the leverage and agents now have to pay in US dollars to the US banks can pay in yen (I've finally worked out why the US dollar is roaring ahead despite the financial madness that exists in the US).
Question is: What now?
Predictions. Banks keep getting liquidity from corrupt central banks but don't know what to do with it other than buy Treasuries. Then China or Japan tips the scales on US Treasuries. The rats flee...to...what? Yen? No oil supply. Dead. Euro? You've got to be kidding. To...to...GOLD AND SILVER. Comex defaults. Banks already know that and have prepared. Only the stupid foreigners own gold and silver now through Comex.
Then US government defaults and sets up the new currency and tells its enemies to pay in the new currency for oil or its nuclear war.
And it's back to the gold standard with the criminals with all the gold. And oil. All over again.
Just you wait.
Posted by: Karmaisking | October 28, 2008 at 02:32 AM
Karmaisking,
The first currency to announce it is backed by gold will force others to do so once USD defaults. Failure will result in economic collapse like Iceland within days.
Posted by: OC | October 28, 2008 at 02:40 AM
I'm going to fix my typos if it's the last damn thing I do before killing myself over the crazy-low gold price (I'm so screwed!):
Yes, you deserve this year's Nobel Prize. No question. Certainly much more than the current publicity-obsessed "celebrity" who has it.
OK, yen carry trade is dying. Yen up. US dollar up, because the US banks facilitated the leverage and all the hedge funds and other "agents" now have to pay in US dollars so the US banks can in turn pay in yen (I've finally worked out why the US dollar is roaring ahead despite the financial madness that exists in the US).
Question is: What now?
Predictions. Banks keep getting liquidity from corrupt central banks but don't know what to do with it other than buy Treasuries. Then China or Japan tips the scales on US Treasuries. The rats flee...to...what? Yen? No oil supply. Dead. Euro? You've got to be kidding. To...to...GOLD AND SILVER. Comex defaults. Banks already know that and have prepared. Only the stupid foreigners own gold and silver now through Comex.
Then US government defaults and sets up the new currency and tells its enemies to pay in the new currency for oil or it's nuclear war.
And it's back to the gold standard with the criminals with all the gold. And oil. All over again.
Just you wait.
Posted by: Karmaisking | October 28, 2008 at 02:42 AM
Elaine,
What next?
Oct. 28 (Bloomberg) -- State-run Korea Development Bank received Federal Reserve approval to sell as much as $830 million of commercial paper to the U.S. central bank, becoming the first Korean bank to tap the new funding facility.
KDB, South Korea's largest issuer of overseas debt, can raise $400 million in the U.S. by selling short-term notes, Sung Joo Yung, a spokesman for the Seoul-based bank, said today by telephone. The bank will roll over an existing $430 million of debt, he said.
Kookmin Bank, South Korea's largest, was also deemed eligible to sell commercial paper to the Fed, spokesman You Jung Youn said by telephone from Seoul.
Posted by: KC | October 28, 2008 at 05:43 AM
I have never read anything so shocking. Can anyone verify the scientific data in here?
http://www.progressiveconvergence.com/Aids-made-in-America-Jourv5n3.pdf
Posted by: GK | October 28, 2008 at 05:46 AM
There are some proposed fields of study in academic circles that have never accumulated the mojo of areas such as say, physics, geography, or biology. I decided that linguistics lacked mojo long ago, and set out to furnish it with some. People can learn multiple languages, or study their history, evolution, and provenance or even their typology, but the handful of theories that purport to attempt to explain how language functions seem to be very far from adequate (except for my own). I don't know quite enough about it to be very sure, but economics has every earmark of being one of those theory-poor pseudo-sciences. It certainly has its critics. Consider:
France 24 News
10/24/08
by Y. Euny Hong
http://tinyurl.com/55rgw8
|¯¯¯¯¯¯
...Come to that, there have long been detractors who thought the economics award was a bad joke in itself. Almost since its inception in 1969, some members of the Swedish Academy have called for its abolition, as have descendants of the Nobel family. One winner, Friedrich Hayek, who won the prize in 1974, subsequently said that had his opinion been consulted, he would “have decidedly advised against” its creation.
In fact, the original will and testament of Alfred Nobel, drafted in 1895 (a year before his death), made no mention of a prize for economics. It was in fact a creation of the central bank of Sweden, and is officially known as The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Purists insist that it is in fact not a proper Nobel Prize but an adjunct prize.
[....]
The most notorious example came in 1997, when economists Robert C. Merton and Myron Scholes were honoured for their work (with the late Fischer Black) on the pricing of options - complex financial instruments spun off from traditional investments. Scholes had been one of the co-founders of a boutique hedge fund in the USA called Long Term Capital Management (LTCM). The fund made annual returns of over 40% in its first years; then, in 1998, it lost $4.6 billion overnight, and was bailed out by the US government - the most controversial bank bailout in US history prior to the current financial crisis. Its sensational failure was attributed to holes in the Black-Scholes theorem, which did not allow sufficient room for market anomalies.
|______
Here is a picture of the 'Derivatives Nobel Award':
http://tinyurl.com/5ohsa9
So I wouldn't hold my breath waiting for one.
Posted by: blues | October 28, 2008 at 07:53 AM
Thanks Blues!
'The Black-HOLES Theorem' will join the Pantheon of gnome silliness.
Posted by: Elaine Meinel Supkis | October 28, 2008 at 08:13 AM
GK -
Thanks for that bizarre link about manufactured diseases. This has been an ongoing theme - governments purposely harming people with the intent of global de-population.
There have been a great many articles warning us of dangerous vaccines - for example:
http://www.dailypaul.com/node/70518
The attacks are not limited to bodily health as our minds are under attack as well.
"Dimming down: How the brainpower of today's 14-year-olds has slipped 'radically' in just one generation" - By Laura Clark
"The intellectual ability of the country's cleverest youngsters has declined radically, almost certainly due to the rise of TV and computer games and over-testing in schools."
"The 'high-level thinking' skills of 14-year-olds are now on a par with those of 12-year-olds in 1976."
http://tinyurl.com/6nk3dc
****************************************
This is the stuff that is really scary, much more than the timely Halloween horror films. The elites are far more horrific than anything hollywood can conjure up.
Posted by: DrKrbyLuv | October 28, 2008 at 10:27 AM
Speaking of linguistics.
I've been watching a project called Half Past Human for a couple of years. These guys mine linguistic shifts on the internet, run them through some kind of mega filter for changing "memes" that they say predict future events.
Sounds crazy, I know, but they have a pretty impressive track record.
There more public face is a site called;
www.urbansurvival.com
Which bills itself as an economic newsletter, but is really much, much more. It is actually the only subscription service that I pay for and I am CHEAP CHEAP CHEAP.
My latest paranoid delusion is that the same banks that are being backstopped with our tax dollars and protected from short selling are riding the wave down thus. (Not that they created it.)
They call the margins on the hedge funds and short the market like crazy (with a big dollap of insider information) and clean up on the down side.
It makes a sort of creepy sense if you consider that short selling is about the only "sure bet" anywhere right now and the banks are DESPERATE for profits because the derivatives beast is burning through their assets faster than they can get infusions from the GOV.
Posted by: PK Scott | October 28, 2008 at 10:35 AM
blues -
Good point about the "theory-poor pseudo-sciences." Legitimacy for un-proven theories seems to run rampant in every field of endeavor. Science and technology are being built on rotten foundations that undermine their credibility - on purpose?
We seem to be stuck in a quagmire of misinformation at every turn. I think this is part of the psychological plan for people to lose hope in all systems.
Posted by: DrKrbyLuv | October 28, 2008 at 10:38 AM
Had a chance to play racquetball with some young investment bankers/and their sons. Bunch of fucking assholes. Didn't let me warm up, didn't wait for the score to serve, no handshake after game. I don't know anything about the sport, but I don't think it's radically different in etiquette than tennis. When I joked about one of their sons' being extremely rude doing all 3 of above (even though he was way better than me), his father's friend remarked, "good on him", another "he's doing what he's gotta do".
Then dinner after the game leads to conversation about the news. The general tone is: why can't the "whiners" just die off and make things easier for those who keep the world running (them).
I am never hanging out with these fuckers again
Posted by: Timothy | October 28, 2008 at 10:46 AM
PK Scott -
Thanks for the link, the "Half Past Human" site looks interesting and seems to comply with many other predictions:
"It is possible to lift out whole layers of meaning from the concealing jumble of the patterns of the pre-creation ripples from future events. Now we can note that the very last gasp effort of the 'dominator' culture will be expressed over 2008 and 2009. These 'control freaks' otherwise variously described as 'illuminati', and 'cabal', and 'Bilderbergers', are going to be using *every* effort, that is to say, *all* their energy over these next 2/two years to attempt to [restrain] the [loss of control] which are implied by emerging future patterns. That the effort is doomed to fail will not deter them from wasting vast quantities of the planet's dwindling resources in the attempt. They are truly desperate people now. And the data sets point to the [desperation] rising at a very rapid rate from the [vernal equinox, spring] onward."
http://www.halfpasthuman.com/NuHPHTheFuture.htm
There has been much written about the year 2012 (Mayan calendar for example) and the coming of the age of aquarius - I think it is around 2021.
Evidently we are entering into a time of truth that could rock the world of the elites - according to some.
One can hope!
Posted by: DrKrbyLuv | October 28, 2008 at 10:55 AM
DrKrbyLuv,
interesting stuff. Never thought of future events as transmitters to our present. Don't stop at the philosophical level though: exactly what data is the website referring to?
Ron Paul doesn't come up with this, but his supporters sure do
Posted by: Timothy | October 28, 2008 at 11:15 AM
Dutch banker said: "GM is dying? I dont think so, their bread is buttered in China!"
Ahem, then why is that GM is looking to merge with Chrysler and NEEDS (more of)taxpayers' money to do so, if, as you put it; "their bread is buttered in China"?
Posted by: Blunt Force Trauma | October 28, 2008 at 11:34 AM
For Dutch Banker...
More 'butter' for the proverbial 'bread'? I think not. But do read on....
G.M. Speeds Hat in Hand to Treasury (NYT)
"G.M. and Chrysler need about $10 billion to make a deal work, and Mr. Wagoner would like the government either to inject capital into the company directly, give it a loan or let G.M. sell troubled financial assets to the Treasury."
Either way, the above cites that neither have the capital to make it work and either way the taxpayer gets it straight up the wazoo.
Full article:
http://tinyurl.com/5ngt7d
Oh and there is NO butter for that bread to be had here:
GM's Sales Drop in China Puts Forecast In Doubt (WSJ - Oct. 16/08)
http://tinyurl.com/5h7tq9
Posted by: Blunt Force Trauma | October 28, 2008 at 11:43 AM
Timothy: your story rings familiar with me. I went to school with people who had the EXACT same moral/ethical code. How did they get so sleazy? I don't know, Maybe their parents did it to them. They are a bunch of spoiled rotten rich kids who think lying, cheating and stealing is a code of conduct. There's really only ONE solution: Prison. Put these sleazeballs in a REAL prison for long term. Maybe their kids will learn from what happens to daddy. I do know this: daddy getting B-F'ed rough and deep a bunch of times while in prison will change HIS point of view.
Posted by: Paul S | October 28, 2008 at 11:44 AM
Here is a 'tag-team' match for your dining and dancing pleasure:
PM Putin suggests Russia, China ditch dollar in trade deals (RIA Novosti)
http://tinyurl.com/5tyrxv
Posted by: Blunt Force Trauma | October 28, 2008 at 12:05 PM
Timothy - "interesting stuff. Never thought of future events as transmitters to our present. Don't stop at the philosophical level though: exactly what data is the website referring to?"
You may want to ask PK Scott as I am not a subscriber to that website. I just was commenting that there are many references to coming events - something big. It may simply be superstition. If it is just superstition, it would take on relevance if the NWO elites placed credibility in it.
Posted by: DrKrbyLuv | October 28, 2008 at 12:06 PM
Timothy: Use More KILL Shots next time.............
As the conversations continue about the trade deficit and the Derivative market, I have come
to the resolution to pay off our debt. CNBC on
November will show at 10pm Eastern time, "The
Business of High End Prostitution". Sex, a commodity of supply and demand is still going strong. San Francisco has on the ballet Prep-K,
Decriminalizing prostitution. So when Obama gets
into office, sign into law for all 50 states,
for legalization. If Spitzer was paying $ 80,000
a year for his Sugar, I bet this industry would be trillions instead of billions. Case resolved. Maybe Mccain was right, I will balance the budget in 4 years, hidden agenda?
Posted by: don | October 28, 2008 at 12:12 PM
cnbc progam on November 11th..10pm
oops, forgot the date from previous post..
Posted by: don | October 28, 2008 at 12:14 PM
Don, sex sales has always been a key component of civilizations. In Dark Ages and other times, women's bodies are worth very little.
So we should encourage high prices, eh?
Posted by: Elaine Meinel Supkis | October 28, 2008 at 03:54 PM
Timothy,
Many years ago I worked as a legal assistant on a major case involving a dispute between the top excecutives of a major American oil company. I would sit in the evening and sip Jack Daniels while listening to these CEO's talk about "whacking" the other officers and doing all kinds of other illegal crap. They had Japanese martial-arts bodyguards and they were the most disgusting group of men I had ever met. They dined on steak and lobster every night and were grossly overweight.
Their whole lives revolved around money and power and sometimes collecting a trophy wife on the side. They clearly had no souls or had sold them long ago. They even looked evil. Their constant worrying about being assassinated or backstabbed made it impossible for them to sleep or stay in good health.
I am glad I saw this, even though I regret ever being a part of it, because it was fascinating to hear them with my own ears in private and know what kind of men they truly were.
Sometimes we have to come close to the demons in order to know why we must stay as far away from them as possible.
Posted by: DeVaul | October 28, 2008 at 04:00 PM
Devaul - I agree with that.
I've seen meeting too. Good and bad. At the "lower levels" folks are usually just trying to work things out.
Peace,
Ken
Posted by: Buffalo Ken | October 28, 2008 at 04:23 PM
Do typos matter?
"DeVaul"
&
"I've seen (been to) many meetings also"
Lastly, when I say "lower" there is no derogatory connatation. To be frank, I think lower is better in so many ways.
Better not to be ruthless, if you know what I mean.
Peace,
Ken
Posted by: Buffalo Ken | October 28, 2008 at 04:25 PM
Few people spell my name correctly, so I am used to it. Maybe that is why it does not look like the original name from my ancestor, Devalt Mock, who lived in southern Germany about 300 years ago.
My name has been passed down from father to son, grandfather to grandson, for countless generations. It traveled through Holland on the way to America. I often wonder what it means and when it was first used.
Posted by: DeVaul | October 28, 2008 at 04:58 PM
DeVaul - as far as I know, my name means "small house". Diminutive if you must know. Many of my ancestors also game from Germany - they were thought of "lowly" origin.
Nonetheless, I know better, plus, being an American, just about nothing in me is "pure". I come from many places, but I know this - go back a few thousand years (just a few thousand) and we are all connected. Literally.
Peace,
Ken
Posted by: Buffalo Ken | October 28, 2008 at 05:11 PM
My father's family is from Ireland, but my mother's is from Germany and that is where I got my name from.
I have my own theory about ancestry. Since most peasants died young or were killed off in wars and massacres, not to mention being raped by feudal overlords and invading enemies, I believe that most people who survived are actually descended from nobles and their armies. That may explain why someone from America can be traced straight to Ghengis Khan or one of his brothers.
I could be wrong about this, but given the low chances for survival among peasants, it is not wholly unbelievable. Of course, most of us are descended from bastards who will never be recognized by our "betters".
Probably a good thing, too.
Posted by: DeVaul | October 28, 2008 at 05:39 PM
I guess an "investment banker" would matter to themself, but for the rest of humanity, cant think of a reason for their existence here.
Posted by: DP | October 28, 2008 at 06:02 PM
I guess an "investment banker" would matter to themself, but for the rest of humanity, cant think of a reason for their existence here.
Posted by: DP | October 28, 2008 at 06:02 PM
Elaine: we could use a voucher from the
govt to subsidize for those who cant
afford it or start the Head Sex program,
instead of the Head Start program, he he..
I always wonder why the Superbowl was the worst day for women, Abuses are up over
100%. So we encourage the game with 3 million dollar commercials and no public
announcement for those who beat their wives.
Posted by: don | October 28, 2008 at 06:32 PM
I come from Connecticut, and the richest people do not officially live there. Actually, they live everywhere. But Connecticut, especially Fairfield County where I'm from, pretty clearly has more CEO-types than anywhere else.
The truly rich ones seemed to be much like the poor (or "middle class"); they might be alright, and they could be scum. But they did not have to stoop to going to board meetings, and dreary folderol like that. The CEOs and political big-shots were different. There is a lot of "overlap" here, but the CEO-types were never to be trusted behind one's back. Not giving a damn was their job description. The word "pirate" comes to mind. Real pirates do not make "bootleg music albums"! You are on some boat watching the whales or whatever, and these pirates just come aboard and slit your throat, and take everything! You are just another slice of veal to them.
This is so funny. Probably most of our teachers, educators, and other vassals of our esteemed brahminariat media cartel are unaware of the vast amorality above them. Yes, Virginia, there are high places where decency wears like patched denim.
Posted by: blues | October 28, 2008 at 06:43 PM
Correct, Blues.
And most politicians ape appearing to care when they care only for themselves. I know this from watching the top of the power pyramid as a child.
True example: every damn time we came close to instant WWIII and the annihilation of our cities, the top dogs would run for the hills or into their deep crypts while publicly telling everyone to not panic and NOT LEAVE THE DEATH TRAPS.
I was thoroughly disgusted by this.
Posted by: Elaine Meinel Supkis | October 28, 2008 at 11:41 PM
Every year, the politicians trot out the SAME rhetoric: they want to cut taxes, create jobs, etc. My question is, WHY do they get away with this BS? I can't believe McCain has the nerve to say he will create jobs when elected President. 6-7 MILIION manufacturing jobs have left the US since 2000, but now in 2008, we have a Republican trying to pass himself off as a 'job growth' candidate. What is it gonna take to wake people up? Scary thing is, Palin is the more sensible one. McCain's health care plan tells the more accurate story. Everybody gets $5000 for their health care BUT it's taxable income. I wonder if McCain actually had input in this scheme or did he let Big Pharma and the Insurance companies draft this? And how long it will take before EVERYONE'S health care plan will cost more than $5000? Do our politicains get the message that the voter is fed up and actually DO something that helps the average Joe/Jane? No. They draw up a thinly disguised "plan" to keep the entrenched special interests happy. We're doomed. But then again, I'm a Socialist. I want to redistribute Joe the (unlicensed) Plumber's wealth.
Posted by: Paul S | October 29, 2008 at 05:32 PM
Hey Elaine
About the Oak, maybe it's just time.
The other scary thing is you are describing the origin of the widow maker.
If you were evil you would have been greeted with that impact.
Posted by: Impatient Patriot | October 29, 2008 at 07:31 PM